Nikola has killed off plans for a pick-up truck as it unveiled a scaled back, non-binding agreement to collaborate with General Motors.
An earlier deal in which GM would have taken a $2bn stake in the business and contract-build Nikola’s pick-up truck was torn up after the start-up was accused of an “intricate fraud” by a short-seller.
Under this latest transaction, Nikola will still integrate GM’s hydrogen technology into its long-distance lorries, but GM will no longer take a stake in the business.
The Badger pick-up truck, a Nikola side project championed by ousted founder Trevor Milton, has therefore been cancelled, and the company will refund deposits from the vehicle, it said on Monday.
Nikola’s shares fell more than 17 per cent in pre-market trading on Monday.
The group began collecting deposits of up to $5,000 for the vehicle in the summer, and had $6.9m in deposits at the end of September, according to its most recent results.
Nikola boss Mark Russell played down the importance of the Badger pick-up truck, which had helped to fuel Nikola’s stock price, in an interview with the Financial Times in October.
“Heavy trucks remain our core business and we are 100 per cent focused on hitting our development milestones to bring clean hydrogen and battery-electric commercial trucks to market,” Mr Russell said on Monday.
Doug Parks, GM executive vice-president of global product development, purchasing and supply chain, said: “This supply agreement recognises our leading fuel cell technology expertise and development.”
Nikola and GM first announced a deal in early September where the Detroit carmaker would own a near 11 per cent stake of the company in exchange for manufacturing the Badger truck.
However talks between Nikola and GM over terms of a deal had dragged on since short-seller Hindenburg Research released a report that included alleged misrepresentations by the Arizona-based company and its founder Mr Milton.